Park Elektrik Report - 15 Ağustos 2012

2Q12 earnings review: Higher bottom-line thanks to one-off gains…

Park Elektrik Madencilik posted a TRY 45mn net profit in 2Q12, exceeding our estimate of TRY 32.5mn and the consensus estimate of TRY 32.3mn. Revenues also rose by 131% y/y/ and 17% q/q to TRY 78mn, which surpasses our estimate of TRY 63.4mn and the consensus of TRY 61.3mn.

Park Elektrik’s EBITDA came in at TRY 39.1mn, hence below than our estimate of TRY 47mn and consensus of TRY 43.0mn. Yet although EBITDA was below the estimates, one-off gains helped to boost the bottom line. Dividend income of TRY 5.2mn from Park Termik, and the correction in group accounting transactions brought a TRY 6.8mn income, which explains the deviation between our estimates and actual figures.

Meanwhile, the EBITDA margin came in at 50.1%, which is significantly below our estimate of 74.1% and consensus estimate of 70.1%. According to company officials, this fall mainly stemmed from increasing costs of underground mining. In the nature of the mining business, increasing the depth of underground mining raises costs, and we expect lower margins when compared to the previous three quarters.

Although we observe lower operational margins in the financials, one-off gains have boosted the bottom-line. The share price rises 0.4% following the release of the financials amid prevailing negative market sentiment and we view them as slightly positive for the share price. All in all, we maintain our “Accumulate” recommendation with a target price of TRY 6.12.